The Best Buy post-earnings surge continued Wednesday as the shares gained another 2 percent. The stock is now up 22 percent since releasing a blowout quarter before the bell on Tuesday, and one trader is expecting the rally to continue.
On Tuesday, when Best Buy saw it best session since 2001, a trader bought 1,000 October 40-strike calls for $1.00, betting that Best Buy could close above $41 by October expiration, another 2 percent rise in the next 60 days.
Mike Khouw, chief strategist at Optimize Advisors, sees the trade as one that "makes a lot of sense."
"That $1.00 [you pay] represents just 2.5 percent of the current stock price and it's easy to see this stock move 5 percent one way or the other in the next 60 days," Khouw said Tuesday on CNBC's "Fast Money." "You're not risking a whole lot given the big gap upwards that it's had."
Best Buy crushed earnings estimates in its Tuesday premarket-open report. With this week's surge, the stock is currently up more than 32 percent from January, helping Best Buy break out of a relatively monotonous year so far.